Islamic Banking Theories, Practices and Insights for Nigeria

International Review of Business Research Papers, Vol. 5, No. 1, pp. 321-339

32 Pages Posted: 3 Sep 2008 Last revised: 11 May 2009

Date Written: September 2, 2008

Abstract

The broad aim of this paper is to introduce knowledge of Islamic banking theories and practices to banking and finance scholars and practitioners in Nigeria, as well as draw some useful insights on Islamic banking in Nigeria. Prohibition of interest, low consumer lending, profit and loss sharing and high real sector investing are primary characteristics of Islamic banks. Islamic banks operate the three conventional deposit accounts. They also engage in investment financing, trade financing, lending, and other financial services. Differences between Islamic and conventional banks lie in prohibition of interest, emphasis on Islamic principles of morality, emphasis on collateral, certainty of deposits and returns, liquidity risk and solvency risk; while similarities between Islamic and conventional banks lie in profit-making objective and nature of banking services. Though there is a dearth of Islamic banks in Nigeria, Islamic banking has become a fast growing concept. The emergence of full-fledged Islamic banks in Nigeria should be expected in the near future.

Keywords: Islamic Banking, Nigeria

JEL Classification: G21

Suggested Citation

Aburime, Toni, Islamic Banking Theories, Practices and Insights for Nigeria (September 2, 2008). International Review of Business Research Papers, Vol. 5, No. 1, pp. 321-339, Available at SSRN: https://ssrn.com/abstract=1262291

Toni Aburime (Contact Author)

Deakin University ( email )

221 Burwood Highway
Burwood, Victoria 3125
Australia
+61 4 20635563 (Phone)

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